TCR_Public/010207.MBX          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Wednesday, February 7, 2001, Vol. 5, No. 27


AGRIBIOTECH, INC: Confirmation Hearing Set for March 5
AMERICAN ECO: Seeks Extension of Exclusivity through May 31
BUGLE BOY: Files for Bankruptcy in California
CONTINENTAL GLOBAL: Moody's Junks Equipment Maker's Debt Ratings
CONVERSE INC.: Court Gives Interim Okay to BTCo DIP Financing

CRESENDA WIRELESS: Shuts Down Due to Lack of Funding
CRUISE SHIP: S&P Lowers Securitized Note Ratings to BBB
DIMAC HOLDINGS: Court Approves Label Art Unit Bidding Procedures
EMPIRE OF CAROLINA: Raises $8MM from Sale of Three Subsidiaries
eTOYS INC.: Intensifies Cost Reduction Efforts

eTOYS INC.: Faces Delisting from Nasdaq in May
FIRST WAVE: Files Pre-Negotiated Chapter 11 Case in S.D. Texas
FREDERICK'S OF HOLLYWOOD: Wants Exclusivity Extended to July 2
GC COMPANIES: Asks for Extension of 365(d)(4) Period to May 10
GENESIS HEALTH: Agrees Mellon Bank Can File One Proof of Claim

GORGES HOLDING: Proposes $1.4 Million Retention & Severance Plan
GRAND COURT: Court Extends Exclusive Period through March 2
IMPERIAL HOME: Confirmation Hearing Scheduled for March 16
IMPERIAL SUGAR: Will Pay Prepetition Sugar Beet Growers' Claims
INTEGRATED HEALTH: Sells Camden, AR, Pharmacy for Cash & Notes

KEVCO,INC.: Files for Chapter 11 Protection in Texas
LERNOUT & HAUSPIE: Executives Sold Shares During SEC Probe
LIR ENERGY: S&P Rates Gives BB- Rating to $150,000,000 Note Issue
LTV CORPORATION: Trustee Appoints Official Noteholders' Committee
LTV CORP.: Increases Cleveland Production & Recalls 400 Workers

MARINER POST-ACUTE: Seeks Exclusivity Extension through Apr. 30
NEWSTAR MEDIA: Selling Publishing Assets for $4,000,000
OMEGA HEALTHCARE: Moody's Junks REIT's Credit Ratings
OWENS CORNING: Asks for Extension of Removal Period to May 3
SAFETY-KLEEN: Amends $100,000,000 DIP Financing Pact With Lenders

SUN HEALTHCARE: Court Stays Highland's Motion On New River Lease
TALISMAN ENTERPRISES: Files an Assignment in Bankruptcy
TRANS WORLD: Competitors Call Boeing about TWA's 717 Contracts
U.S. WOOD: Wants Until Mar. 28 to Assume or Reject Leases
WHEELING-PITTSBURGH: To Increase Steel Selling Prices on March 4

* Meetings, Conferences and Seminars


AGRIBIOTECH, INC: Confirmation Hearing Set for March 5
Following a hearing held on January 3, 2001, the US Bankruptcy
Court for the District of Nevada, the Honorable Linda B. Riegle
presiding, entered its order approving adequacy of information in
a Disclosure Statement presented in support of the joint plan of
reorganization for Agribiotech, Inc., Las Vegas Fertilizer Col.,
Garden West Distributors and Geo W. Hill & Co., Inc.  The
bankruptcy court will hold a hearing to consider confirmation of
the plan commencing on March 5, 2001 at 9:30 AM.

Under the proposed plan, the 1999 Growers Claims are approximated
at between $45 million and $50 million and General Unsecured
Claims approximate $80 million.  The plan proponents project that
the debtors will have approximately $19.5 million in available
cash on or near the Effective Date.  The plan proponents project
that distribution to the holders of allowed unsecured claims will
be 3.5 cents on the dollar, subject to an increase based on the
recoveries from various Litigation Claims.

AMERICAN ECO: Seeks Extension of Exclusivity through May 31
American Eco Holding Corp., et al., seek a further extension of
their exclusive periods during which to file a Chapter 11 plan
and solicit acceptances of that plan.

A hearing on the motion will be convened before The Honorable Sue
L. Robinson, US District court, Wilmington, DE, on February 15,
2001 at 4:30 PM. Co-counsel for the debtors are Michael S. Etkin
and Bruce Buechler of the law firm Lowenstein Sandler PC and
Laura Davis Jones, Bruce Grohsgal and Michael R. Seidl of the law
firm Pachulski, Stang, Ziehl, Young & Jones, PC.

The debtors are looking for a further extension of their
exclusive Filing Period for ninety days from March 2, 2001
through and including May 31, 2001.  The debtors also seek a
concurrent extension of the Exclusive Solicitation Period within
which the debtors maintain the exclusive right to solicit votes
on such a plan for ninety days from May 1, 2001 through and
including July 30, 2001.

This is the debtors' second request for an extension of the
Exclusive Periods. The debtors have focused their efforts on
selling substantially all of the debtors' businesses and assets.
The debtors, their management and professionals have been focused
upon liquidating assets in the most efficient and expeditious
fashion possible under the circumstances. Given the extent and
nature of the debtors' various businesses and assets, the debtors
have not yet had a sufficient opportunity to fully explore,
negotiate, and formulate a plan.

BUGLE BOY: Files for Bankruptcy in California
Clothing maker Bugle Boy, a fashion powerhouse in the 1980s, has
filed for bankruptcy protection, according to the Associated
Press. The privately held company, which made a name for itself
20 years ago through its balloon-like parachute pants, will
likely be broken up and sold, according to Bugle Boy bankruptcy
attorney Paul Aronzon. The filing was made on Thursday February
1, 2001 in U.S. Bankruptcy Court, Central District of California.
Company officials declined comment Friday.

Aronzon said the company's largest creditor, a syndicate led by
Foothill Capital Corp. and General Electric Credit, are owed
roughly $75 million. About $30 million is owed to additional
lenders, he said. Bugle Boy founder William Mow left the company
last week and has been replaced by an interim chief executive.
The company has abandoned its Simi Valley headquarters building,
laying off some workers, and has begun closing its 150 retail
locations. It was unclear on Friday how many people Bugle Boy
employed nationwide. Bugle Boy plans an immediate selloff of
inventory and equipment, Aronzon said, with retail stores holding
blowout sales before shutting down. Company trademarks hold the
greatest value, he said, and the liquidation team is already
fielding offers for the sportswear brand. (ABI World, February 5,

CONTINENTAL GLOBAL: Moody's Junks Equipment Maker's Debt Ratings
Moody's downgraded Continental Global Group, Inc.'s (Continental
Global) rating for:

      * $120 million of 11% Series B guaranteed senior notes, due
        2007, to Caa1 from B3.

Moody's also took rating actions on the following:

      * the company's senior implied rating was downgraded to Caa1
        from B3, and

      * the company's senior unsecured issuer rating was lowered
        to Caa2 from Caa1.

The rating outlook is stable.

According to Moody's, the downgrades reflect Continental Global's
modest cash flow relative to debt levels, thin interest coverage,
limited liquidity, and, because of its weak balance sheet, the
potential for impaired principal recovery should the company have
difficulty meeting its fixed obligations. However, Moody's
recognizes the company's success in controlling costs and
preserving cash over the last two years, a period of sharply
lower sales, and sees potential for Continental Global's business
to improve modestly in 2001, due primarily to the positive impact
of higher coal prices on conveyor equipment sales.

Based in Winfield, Alabama, Continental Global Group, Inc. is a
holding company engaged in the design, manufacture, and
installation of conveyor equipment systems, primarily for mining
applications in the coal industry. It has operating subsidiaries
in the US, Australia, the UK, and South Africa.

CONVERSE INC.: Court Gives Interim Okay to BTCo DIP Financing
A bankruptcy court gave interim approval to Converse Inc.'s
(CVEO) post-petition debtor-in-possession credit facility from a
group of lenders led by agent Bankers Trust Co., according to a
Form 8K filed Wednesday with the Securities and Exchange
Commission. The filing didn't disclose the amount of the interim
financing.  Bankers Trust is an affiliate of Deutsche Banc Alex.
Brown. A final hearing is scheduled for Feb. 12 before the U.S.
Bankruptcy Court in Wilmington, Del., according to the court
docket. (ABI World, February 5, 2001)

CRESENDA WIRELESS: Shuts Down Due to Lack of Funding
A spokesperson for CreSenda Wireless has confirmed that the
wireless provider has shut its doors. The company attributed its
sudden downfall to a lack of funding and the general
precariousness of the technology sector at this time.

"Obviously we are all deeply disappointed that additional funding
did not materialize," said Douglas Dobie, president of CreSenda.
"We continue to believe that our approach will be proven as a
viable and successful wireless application service provider
strategy." Dobie recently joined CreSenda from AirTouch/Vodafone,
where he served as group director of strategy development.

A source close to the company is reported as saying that
CreSenda, which delivers business content to handheld devices,
has let the majority of its staff go and will immediately cease
wireless connectivity to its 600 subscribers. The company has no
plans at this time for selling its technology assets. Several
months prior to hitting rock bottom, the company had entered into
alliances with other wireless providers to strengthen its
position in the wireless industry. In July 2000, CreSenda
Wireless announced an alliance with AT&T Wireless Services to
deliver industry-specific enterprise data to mobile
professionals. The two companies signed a three-year agreement.
Also last July, CreSenda announced an alliance with AvantGo Inc.,
a provider of mobile infrastructure software and services, to
enable mobile users with the CreSenda Wireless Professional
Series to access content and applications in targeted vertical
markets. Headquartered in Los Angeles, CreSenda Wireless is
backed by Pointwest Capital, Triumph Holdings, and Chase H&Q.
(ABI World, February 6, 2001)

CRUISE SHIP: S&P Lowers Securitized Note Ratings to BBB
Standard & Poor's lowered its ratings on the class A and B notes
issued by Cruise Ship Finance Ltd. to triple-'B'-minus from
triple-'B' and removed the ratings from CreditWatch with negative
implications, where they had been placed on Jan. 25, 2001.

The rating action reflects Standard & Poor's Jan. 22, 2001
downgrade of Royal Caribbean Cruises Ltd.'s (RCL) corporate
rating to triple-'B'-minus from triple-'B'. As the underlying
obligor on the receivables held by Cruise Ship, RCL is a
supporting rating to the transaction.

In its analysis of the consequences of RCL's downgrade, Standard
& Poor's took into consideration the fact that in a situation
where RCL is in default, Cruise Ship's noteholders have access to
the sale proceeds of the ships that are the object of the
receivables on RCL. In addition, because only 85% of the purchase
price paid by RCL for the ships was financed by Cruise Ship, and
a 25% residual market value guarantee was provided directly by
Alstom Holdings to Cruise Ship, a special-purpose entity,
noteholders benefit from additional protection against potential
market value decline.

Nevertheless, in order for Standard & Poor's to elevate the
rating of the transaction above that of RCL using a market value
approach, all of the following conditions must be met

     --  The financed ships must be able to be sold at a discount
         of less than 36.5%, whenever RCL is assumed to default.

     --  The sale process must be completed within six months of
         the default (so that the legal maturity of the bonds is

     --  From a structural standpoint, the transaction
         documentation must be unequivocal as to what entity
         undertakes the sale process and how the sale proceeds are
         used to redeem Cruise Ship's debt.

Standard & Poor's view is that these conditions are not all met
with a sufficient degree of certainty.

Numerous characteristics of the cruise ship industry underpin
this decision. These include the relatively small number of
players active in the industry and their respective credit
quality; the important level of ship orders already made by
existing cruise companies to increase available capacity in the
coming years; the relatively long chartering and marketing
process characteristic of the industry; and the fact that any
cruise liner is made to the purchaser's specifications and that
its unique features can be widely undervalued in a second sale.
Additional factors underlying the decision include the
concentration of risk on only one or at most two ships and some
uncertainty as to how the sale process would be completed, in
light of the transaction's documentation, Standard & Poor's said.

DIMAC HOLDINGS: Court Approves Label Art Unit Bidding Procedures
By court order entered on January 24, 2001, by the U.S.
Bankruptcy Court, District of Delaware, an asset purchase
agreement in respect of the debtors' Label Art business was
approved, authorizing payment of a break-up fee and bidding

Any entity desiring to purchase less than all of the purchased
assets may submit any bid therefor together with a proposed
contract, provided that unless the aggregate offers for any or
all purchased assets equal at least $21.6 million, the debtors do
not intend to proceed with multiple sales of less than all of the
purchased assets.

A hearing on the proposed sale resulting from the Bidding Process
shall be held before the Honorable Mary F. Walrath on February 6,
2001 at 9:30 AM.

EMPIRE OF CAROLINA: Raises $8MM from Sale of Three Subsidiaries
Empire of Carolina, Inc. announced that on January 18, 2001, it
consummated the sale of the outstanding stock of three of its
non-debtor subsidiaries, Dorson Sports, Inc., Apple Golf Shoes,
Inc. and Apple Sports, Inc., for a purchase price totaling
approximately $8 million. The purchase price was comprised of
payment to Empire of approximately $2 million in cash and the
repayment of approximately $6 million in bank loans. As a
condition to the sale, the stock and assets of the subsidiaries
were required to be free of all liens. The purchasers were Dorson
Sports Acquisition, Inc., Apple Shoes Acquisition, Inc. and Apple
Sports Acquisition, Inc. In connection with the sale, Empire
assigned to the purchasers all rights under an executory license
agreement with Pacific Cycles, LLC for the use of the Mongoose(R)
trademark and all rights under a license agreement with Wilson
Sporting Goods Co. for the use of the Wilson(R) trademark.
Timothy Moran, Empire's former CEO, is a principal of the
purchasers. Also, in connection with the sale transaction,
LaSalle National Bank, as agent for the Empire's lenders, agreed
to release each of Apple Golf Shoes, Inc., Apple Sports, Inc. and
Dorson Sports, Inc. from its guaranty of Empire Industries,
Inc.'s bank credit facility and to release Empire Industries,
Inc. from its guaranty of the bank credit facility extended to
Apple Golf Shoes, Inc., Apple Sports, Inc. and Dorson Sports,

The sale was preliminarily approved by the U.S. Bankruptcy Court
on January 3, 2001, contingent upon receipt of higher bids. No
higher bid was received and on January 17, 2001, the Court
entered its Final Order approving the sale.

Empire of Carolina, Inc. which designs, develops, manufactures
and markets a broad range of consumer products including
children's toys, and its subsidiary, Empire Industries, Inc.,
filed for reorganization under Chapter 11 on November 17, 2000
and has continued operations on a debtor-in-possession basis.

eTOYS INC.: Intensifies Cost Reduction Efforts
eToys Inc. (NASDAQ: ETYS) says it provided job elimination
notices to an additional 293 employees located in its Ontario,
California, and Blairs, Virginia, distribution centers.  These
employees are scheduled to end their employment with the company
on April 6. On January 4, the company announced it had provided
job elimination notices to approximately 700 of its employees.
With this action, the company has now issued job elimination
notices to all of its employees, with service dates continuing up
to April 6.

The company reiterated that it anticipates that its current cash,
cash equivalents and cash that may be generated from operations
will be sufficient to meet its anticipated cash needs to
approximately March 31, 2001, although there can be no assurance
in this regard.  In order to continue operations in 2001, the
company will require an additional, substantial capital infusion.
eToys said it does not believe that additional capital will be
available to the company.

The company also reported that its standstill agreement with an
informal committee of its unsecured creditors has been extended
to February 15. Under the agreement, through and including
February 15, the committee members have agreed to forebear from
taking any action to collect on their debts, and the company has
agreed not to pay any past due debts and to operate under a
budget designed to maintain its current operations. During this
extended period, the committee will continue to evaluate the
company's assets and marketing strategy and explore the
possibility of recommending to the creditor constituency
acceptance of an out-of-court workout agreement between the
company and all of its creditors.

The company continues to work with Goldman, Sachs & Co. as its
financial advisor to explore a range of strategic alternatives,
which may include a merger, asset sale or another comparable
transaction or financial restructuring.

eTOYS INC.: Faces Delisting from Nasdaq in May
eToys, Inc., received a notice from NASDAQ that its common stock
has failed to maintain the required minimum bid price of $1.00
over a period of 30 consecutive trading days.  As a result,
NASDAQ has provided the company with 90 calendar days, or until
May 2, 2001, to regain compliance with this requirement or be
delisted from trading. The company believes it is unlikely that
it will be able to regain compliance with this requirement during
this time period and that, by the end of this time period, its
securities will be delisted from trading by NASDAQ.

FIRST WAVE: Files Pre-Negotiated Chapter 11 Case in S.D. Texas
First Wave Marine, Inc. announced that it has filed a petition
for relief under Chapter 11 of Title 11 of the United States Code
in the Southern District of Texas which allows for reorganization
of the Company's debts. In connection with the filing, First Wave
announced that the Company's senior secured working capital
lender has provided the Company with $20 million in post-petition
financing, subject to Bankruptcy Court approval, which will
secure the working capital position of the Company and allow for
the continuance of normal, uninterrupted operations during the

In addition to its request for post-petition financing, the
Company has also requested immediate Bankruptcy Court authority
to pay employees and critical subcontractor and vendor pre-
petition payables on an uninterrupted basis. This will make it
possible for the Company to avoid disruption in its operations
and its network of critical vendors and subcontractors. As of the
date of filing, the Company's payables aging was not outside
industry norms.

First Wave commenced restructuring discussions in December 2000
with an ad hoc committee representing the majority of its 11%
Senior Notes due 2008. The Company did not make its semi-annual
interest payment on the Senior Notes which was due February 1st.
The discussions have been constructive and the Company
anticipates that such discussions will continue during the
Chapter 11 cases and, ultimately, result in a restructuring of
the Company's existing obligations that will enhance the
financial and competitive strength of the Company. The Company
does not anticipate any employee layoffs in connection with the
Chapter 11 filing. The Company presently contemplates that it
will continue under current management during the reorganization
proceedings and upon emergence from Chapter 11.

Sam Eakin, Chairman and CEO of First Wave, said, "This Chapter 11
proceeding is a necessary step for restructuring the Company's
long term debt. The burden of debt service has weighed heavily on
the Company's financial performance. Interest expense accounted
for approximately two-thirds of First Wave's 1999 pretax losses,
and substantially all of its 2000 pretax losses. It is now time
to resolve our challenges and to implement a restructuring of
First Wave. We believe this restructuring will posture the
Company to meet the demands of its growing customer base during
the current upswing in the oilfield services cycle. Our customers
will continue to receive the same consistent level of job
performance and quality that First Wave is known for. Our plans
have been well communicated and have received broad support from
customers, employees and vendors. We have confidence in a timely
and successful emergence from Chapter 11 proceedings."

First Wave is a leading provider of shipyard and related
services, with six shipyards in the Houston-Galveston area. The
Company provides repair, conversion, new construction, and
related services for barges, boats, ships, offshore rigs, and
other vessels in the offshore and inland marine industries.

FREDERICK'S OF HOLLYWOOD: Wants Exclusivity Extended to July 2
Frederick's of Hollywood, Inc. and its affiliated debtors sought
a court order extending for 120 days, periods during which
debtors have exclusive rights to file and solicit acceptances to
plans of reorganization. A hearing on the motion will be held on
February 21, 2001 at 11:00 AM, Roybal Federal Building, Los
Angeles, CA.

The debtors have devoted significant effort to analyzing their
numerous store leases, locating an investment banker and
preparing a go-forward business plan. The debtors require some
time to analyze the results of their post-petition efforts and to
evaluate their options once they have been identified by the
investment banker. The debtors will then be in a position to
formulate and negotiate a consensual plan of reorganization. The
debtors belie e that the 120-day extension will allow them to
accomplish these goals.

With approximately $75 million in liabilities, these cases are
large; the debtors' operations are diverse and national in scope
and include approximately 200 retail stores.

The debtors requested an extension to file a plan and solicit
acceptances thereof through and including July 2, 2001 and
October 1, 2001, respectively.

Reorganization counsel for the debtors are the law firm of Klee
Tuchin, Bogdanoff & Stern LLP.

GC COMPANIES: Asks for Extension of 365(d)(4) Period to May 10
GC Companies, Inc. et al. sought court authority to extend the
time to assume or reject unexpired leases of nonresidential real
property. A hearing on the motion will be held on February 14,
2001 at 12:30 PM before the Honorable Mary F. Walrath, U.S.
Bankruptcy Court, District of Delaware.

The debtors requested an extension of 90 days, to Thursday May
10, 2001, to assume or reject all of the unexpired leases of
nonresidential real property; and an extension to March 12, 2001
for the "Harcourt" leases. A further extension is necessary due
to size, nature and complexity of the debtors' cases and the
debtors' business, the complex legal and economic issues relating
to the Harcourt leases, and potential plan of reorganization; and
the potential value of the leases to the ongoing operation of the
debtors' business.

GENESIS HEALTH: Agrees Mellon Bank Can File One Proof of Claim
The Court's Bar Date order provided that Mellon Bank, as
administrative agent (the Credit Agent) under the Fourth Amended
and Restated Credit Agreement, dated as of August 20, 1999, among
Genesis Health Ventures, Inc. & The Multicare Companies, Inc.and
the Pre-Petition Lenders, may file one proof of claim on behalf
of all of the Pre-Petition Lenders against the GHV Debtors.

Pursuant to a Stipulation and order with Judge Walsh's stamp of
approval, Mellon Bank, may file one or more consolidated proofs
of claim on behalf of itself or all of the Pre-Petition Lenders,
provided that the right of each lender to vote separately the
amount of its respective claim with regard to any plan of
reorganization in the cases will not be affected.

Moreover, the Agent shall not be required to file with any proof
of claim instruments, agreements and other documents evidencing
the related obligations or the security interests and liens,
provided that upon request of the Debtors, the Documents will be
supplied. (Genesis/Multicare Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

GORGES HOLDING: Proposes $1.4 Million Retention & Severance Plan
Gorges Holding Corporation and Gorges/Quik-To-Fix Foods, Inc.
sought authority to implement a retention plan, including the
assumption of certain employment agreements. The Retention Plan
has been designed by the debtors to minimize turnover by
providing incentives for the Key Employees to remain in the
debtors' employ and to work to maximize the value of the debtors'

The estimated total of the proposed Retention Bonus payments are
$786,049. The estimated totals of the severance agreement
payments are $623,000. The plan includes divestiture bonuses
totaling $300,000.

GRAND COURT: Court Extends Exclusive Period through March 2
According to documents obtained by, the U.S.
Bankruptcy Court approved Grand Court Lifestyles, Inc.'s motion
for an extension of the exclusive period during which the company
can file a plan of reorganization through March 2, 2001.

Separately, the U.S. Trustee assigned to the case amended the
official committee of unsecured creditors. The Company has been
operating under Chapter 11 protection since March 20, 2000. (New
Generation Research, February 5, 2001)

IMPERIAL HOME: Confirmation Hearing Scheduled for March 16
The Imperial Home Decor Group Inc. (IHDG) said that it has
received approval from the United States Bankruptcy Court for the
District of Delaware of the disclosure statement for its proposed
plan of reorganization. The court's approval of the disclosure
statement allows IHDG to commence the solicitation of creditor
votes for approval of its plan of reorganization, an important
next step toward its emergence from chapter 11.

The disclosure statement, plan of reorganization and ballots to
vote on the plan are to be mailed to creditors during the week of
February 5, 2001. The deadline for casting ballots is March 9,
2001. The court has established March 16, 2001 as the date for
the plan of reorganization confirmation hearing. If approval of
the plan is obtained at that time, the company anticipates that
it could emerge from chapter 11 by March 31, 2001.

The disclosure statement contains information used by creditors
to evaluate the company's plan of reorganization.

"This is an important milestone toward our emergence from chapter
11," said Douglas R. Kelly, president and chief executive officer
of IHDG. "Many people, including our unsecured creditors'
committee and our lenders, have worked hard to get to this point.
Above all, the people of IHDG have made enormous contributions to
get us to this point."

Kelly noted that while in chapter 11, the company has:

      --  Consolidated its worldwide printing, finishing and
          distribution capacities to improve production and

     --  Realigned operations and streamlined processes to achieve
         efficiencies and cost reductions;

     --  Introduced over 70 new wallcovering collections;

     --  Reduced inventory levels;

     --  Introduced new products including Instant Stencils, Tile
         Stickers and Bedding;

     --  Aligned the company's commercial business unit with LSI
         Wallcovering in order to take better advantage of
         production and marketing opportunities;

     --  Streamlined its sales and marketing organizations;

     --  Revised its North American brand strategies, focusing on
         one Imperial brand to be marketed across various retail

     --  Initiated technological innovations that will allow it to
         better serve its customers and attract new consumers,
         including the Interactive Voice Response order system and
         major internet initiatives to be launched in April 2001.

IHDG filed its chapter 11 case on January 5, 2000 in the United
States Bankruptcy Court for the District of Delaware.

Imperial Home Decor Group is the world's largest designer,
manufacturer and distributor of residential wallcovering
products. IHDG also markets commercial wallcoverings and is a
premiere supplier of vinyl for pool liners through the Vernon
Plastics operating division. Headquartered in Cleveland, Ohio,
IHDG supplies home centers, national chains, independent dealers,
mass merchants, design showrooms and specialty shops. Product
lines include the Imperial, Katzenbach & Warren, Albert Van Luit,
Sterling Prints, Imperial Fine Interiors, Sunworthy and
Colorfields brand names. The Company was created in 1998 through
the merger of Imperial Wallcoverings and Borden Decorative
Products. In 2000, Imperial Home Decor Group had net sales in
excess of $363 million.

IMPERIAL SUGAR: Will Pay Prepetition Sugar Beet Growers' Claims
Imperial Sugar Company sought authority to pay the amounts owing
as of the date of their bankruptcy filing to their most critical
trade creditors. $48 million is owed to sugar beet farmers over
the next ten months.

The Debtors, through their counsel James L. Patton, Jr. and
Brendan L. Shannon of the Wilmington Delaware law firm of Young,
Conaway, Stargatt & Taylor, LLP, provide Judge Robinson with a
brief description of the sugar industry to help explain why
payment of these suppliers is so critical to the Debtors' ability
to successfully reorganize their operations. Sugar is produced
from both sugar beets and sugar cane. The Debtors have roughly
60% of their volume in cane sugar at three cane refineries, and
40% in beets, manufactured at nine sugar beet factories.

The Debtors have one-year contracts with approximately 2,400
sugar beet farmers. Because sugar beets erode in quality quickly,
they must be processed or properly stored shortly after they are
harvested. As a result, the Debtors buy sugar beets from fanners
who are located near the refineries. As soon as the beets are
harvested, they are transported to the factory and then
immediately processed, or where weather permits, stored awaiting

A substantial amount of the harvesting occurs in October and
November. Payments to farmers are made at interim dates extending
through October, 2001, when the largest payment is made. The
farmers are also owed money by the Debtors under a payment-in-
kind (PIK) program instituted by the United States Department of
Agriculture. These payments ($13.8 million) are not due until
October, 2001.

The Debtors argued that it is critical that the sugar beet
farmers know that all of their claims will be paid in full as
they are currently in the process of deciding what crop to grow
for the coming year. If, at any one of the facilities, as few as
ten percent of the farmers decide to grow some other crop, that
facility's cash flow could go from positive to negative.
Accordingly, payment of the amounts owed to the sugar beet
farmers is essential to the successful reorganization in this

The Debtors therefore requested and obtained Judge Robinson's
approval and authorization that all payments to sugar beet
farmers be made as and when due in the ordinary course of the
Debtors' businesses. With respect to any payments to sugar beet
farmers that have been paid, but remain outstanding as of the
Petition Date, the Debtors request that, to the extent
practicable, the banks be authorized and directed to honor such
checks regardless of the whether they were issued pre-petition or
post-petition. In addition, the Debtors seek authority to, in
their discretion, issue new post-petition checks or fund transfer
requests on account of sugar beet farmers to replace any pre-
petition checks or fund transfer requests that may have been
dishonored or denied. (Imperial Sugar Bankruptcy News, Issue No.
2; Bankruptcy Creditors' Service, Inc., 609/392-0900)

INTEGRATED HEALTH: Sells Camden, AR, Pharmacy for Cash & Notes
Integrated Health Services, Inc., and certain of its direct and
indirect subsidiaries, including Camden Medical Supply. Inc.
d/b/a Morrison's Pharmacy of Camden, Arkansas, by their counsel
Young Conaway Stargatt & Taylor, LLP, sought and obtained the
Court's authority, pursuant to sections 105 and 363(b), (f) and
(m) of the Bankruptcy Code and Rules 2002, 6004 and 9007 of the
Bankruptcy Rules, to:

      (1) sell the Retail Component of a Pharmacy in Camden,
Arkansas, free and clear of liens, claims, encumbrances, and
other interests, to William Morrison;

      (2) terminate the related lease with William Morrison.

Pursuant to a Supplemental Motion, the Debtors sought to sell the
assets at $290,000 all in cash to be paid on the Closing Date
instead of $100,000 in cash and $225,282 in the form of
promissory notes as provided in the Initial Agreement. The
amendment is necessitated by the terms of the DIP Financing
Agreement. The Debtors submit that payment of the Aggregate
Purchase Price in cash on the closing date and the associated
elimination of all promissory notes justifies the discount
implemented by the Amendment.

The Pharmacy is located in a storefront premises. The Pharmacy's
business consists of a retail walk-in component, and a nebulizer
medication distribution business (the Neb-Med Component). In
connection with Neb-Med Component operations, the Pharmacy
receives nebulizer medication prescriptions for patients residing
in Arkansas or a surrounding state. The Pharmacy fills such
prescriptions and ships the requested medications to the
appropriate patients.

The Retail Component has proven to be relatively unprofitable.
The Neb-Med Component generates net profits of approximately
$295,000 per month whereas the Retail Component drifts between
break-even and loss. Furthermore, the retail pharmacy business
fits poorly with the Debtors' overall operations. The Debtors
anticipate that the proposed sale will result in increased net

The Debtors submitted that the Retail Component is a relatively
unmarketable concern, with the situation of Camden being in the
throws of a severe economic crisis. Camden's largest employer
since 1923, announced that it will close its Camden facility and
lay-off nearly 700 local workers.

The Debtors estimate that the Neb-Med Component, if severed from
the Retail Component and relocated to a suitable facility, is
capable of expanding by at least 60%. The Debtors intend to
relocate the Neb-Med Component to Pulmadose, Inc. Therefore, the
Debtors believe that it is sound business judgment to dispose of
the Retail Component.

Considering Camden's failing economy and the Retail Component's
deteriorating operations, the Debtors believe that the emergence
of an offer higher or better than the Aggregate Purchase Price is
unlikely. Furthermore, the Buyer, a pharmacist, was the former
owner of the Pharmacy and is its current manager. The Buyer's
familiarity with the Retail Component will allow the Debtors to
avoid the typical post-closing transition period, and related
burdens, normally associated with sales such as the proposed

Therefore, the Debtors believe that the proposed sale of the
Retail Component to the Buyer is more advantageous than selling
be public auction and the asset sale need not be subject to
higher or better offers considering:

      (1) the time and cost in the sales process;

      (2) the grim prospect of obtaining higher or better offers;

      (3) the cost associated with the transition period - the
Retail Component's net profits and commercial value will continue
to decline along with Camden's economy, whereas the Buyer's
familiarity with the Retail Component may allow the Debtors to
avoid some of the typical cost in this period.

The Debtors drew the Court's attention to Bankruptcy Rule 6004
which provides that "all sales not in the ordinary course of
business may be by private sale or by public auction. In
exercising their business judgment, the Debtors have concluded
that the proposed sale to the Buyer, as contemplated by the
Purchase Agreement, will maximize the value of the Retail
Component, in line with the Debtors' obligation under the
Bankruptcy Code.

The Debtors also submitted that the terms of the Purchase
Agreement were negotiated at arms' length and in good faith by
the Seller and Buyer. Accordingly the Debtors requested that the
Court determine that the Buyer has acted in good faith and is
entitled to the protections of a good faith purchaser under
section 363(m) of the Bankruptcy Code. (Integrated Health
Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

KEVCO,INC.: Files for Chapter 11 Protection in Texas
Kevco, Inc. (Nasdaq/NM:KVCO) announced that it and all of its
wholly owned subsidiaries have filed voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy
Code. The petitions were filed in the United States Bankruptcy
Court for the Northern District of Texas.

The Company indicated that the filings were being made as a
direct result of the unprecedented decline in shipments in new
homes that has occurred in the manufactured housing industry.
Kevco indicated that shipments were down in 1999 and that the
latest industry statistics indicate a 26% decline through the
first ten months of 2000. Kevco said that it has an agreement
with its bank group that provides sufficient liquidity to allow
operations to continue with suppliers and customers.

In connection with the Company's plans to sell certain operating
units, the Company has entered into an agreement to sell its
Design Components division to Adorn, LLC. As part of its
voluntary petition filed today, it is seeking the approval of the
Bankruptcy Court for the sale. The aggregate purchase price for
the Design Components division is $13,500,000, subject to certain
adjustments. The parties anticipate that the closing of the sale
would occur on or before February 28, 2001, subject to the
approval of the Bankruptcy Court and the fulfillment of other
conditions to closing.

Kevco, headquartered in Fort Worth, Texas, is a leading wholesale
distributor and manufacturer of building products for the
manufactured housing and recreational vehicle industries.

LERNOUT & HAUSPIE: Executives Sold Shares During SEC Probe
Four Lernout & Hauspie (L&H) executives sold $13 million of the
troubled speech-recognition software maker's stock during a
regulatory investigation, The Wall Street Journal reported
Monday. Three officers and a director of the company sold the
stock in May, after the U.S. Securities and Exchange Commission
(SEC) notified the company it was investigating its accounting
practices, the paper said.

L&H, which is operating under bankruptcy protection, is planning
to cut 20 percent of its work force. Its shares were trading as
high as $70 each last March and have since been delisted from the
Nasdaq stock market. The company in December said its internal
audit committee had found that revenues for the 2-1/2 years ended
June 30, 2000, had been overstated by as much as $277 million.

The executives' stock sales generated $8.9 million in profit,
before L&H shares tumbled on news of the investigation, the paper
said. The four executives said they were unaware of the SEC
investigation when they sold the shares, the Journal reported. A
Belgian shareholder-rights firm, Deminor, is representing more
than 7,000 L&H stockholders in a class-action suit and is
investigating the stock sales, the paper said. It is not illegal
to sell stock just because of knowledge of an SEC inquiry, the
paper reported a New York securities lawyer saying. The key point
is whether "the person knew at the time that there was merit" to
the SEC's inquiry. "If so, then this person may be guilty of
insider trading," the paper quoted Maureen Brundage, co-head of
securities practice at White & Case LLP, as saying. L&H told
investors about the investigation on Sept. 21, and it was
notified of the inquiry by the SEC last January, the paper said.
(ABI World, February 5, 2001)

LIR ENERGY: S&P Rates Gives BB- Rating to $150,000,000 Note Issue
Standard & Poor's assigned its double-'B'-minus foreign currency
rating to LIR Energy Ltd.'s US$150 million global-guaranteed
medium-term notes. The notes are irrevocably and unconditionally
guaranteed by LIGHT-Servicos de Eletricidade S.A. (LIGHT; local
currency issuer credit rating double-'B'/stable, foreign currency
issue credit rating double-'B'-minus/stable), subject to the
approval of the Central Bank of Brazil. LIR Energy Ltd.
(incorporated in the Cayman Islands) is a wholly owned subsidiary
of LIGHT. The notes will constitute direct unsecured and
unconditional obligations of the issuer and will rank at least
pari passu with all unsecured and unsubordinated obligations of

LIGHT's rating reflects the challenges of operating in Brazil.
LIGHT is the electric distribution company serving the city of
Rio de Janeiro, and through a 75% voting stake, Eletropaulo
Eletricidade de Sao Paulo S.A. (Eletropaulo) serves the
metropolitan area of Sao Paulo. LIGHT is still working to offset
the negative impact of the real devaluation in January 1999, for
which the year-end 1999 exchange rate was about 1.85 to one U.S.
dollar. Despite cost cutting efforts and improvement on certain
operating parameters, LIGHT's progress on reducing electricity
energy losses has been disappointing. Offsetting these weaknesses
are a stable customer base with a large residential component, a
monopoly franchise to distribute electricity, and a regulatory
environment that has thus far acted in a timely manner consistent
with the conditions of the concession contract. LIGHT, which was
privatized in May 1996, is now 64.3% controlled by Electricite de
France (double-'A'-plus/negative/A-1-plus)

LIGHT's service territory has not experienced the high growth of
other areas in Brazil. Demand is projected to increase by about
3% annually over the next several years. The large residential
Rio de Janeiro customer base, however, provides some stability
relative to other regions, which have greater industrial
concentration. Industrial customers are more vulnerable to
economic cycles. Eletropaulo has a similar customer profile;
however, it is projecting stronger sales growth than LIGHT.
LIGHT's rates were increased by 12.39% in June 1999 to compensate
the company for the increased cost of Itaipu power purchases--the
cost of this power is indexed to the dollar. In line with the
rise in inflation, LIGHT's base tariffs were increased 16.72% in
November 2000, and will increase 1.3% in February 2001. Other
regulatory concerns, however, are the tariff reset in 2003 and
the ability to pass through the full cost of future power
purchases to customers.

LIGHT's ability to service debt was weakened by the devaluation
of the real in early 1999. LIGHT is attempting to restructure its
debt to reduce exchange risk, reduce costs, and extend
maturities. Still, it will take a few years until the paydown of
debt improves bondholder protection measures materially.
Consolidated financials are adjusted for firm purchased-power
payments made by LIGHT and Eletropaulo, intermediate holding
company debt, and unfunded pension liabilities at Eletropaulo.


The stable outlook reflects expectations of positive sales
growth, regulatory support, and gradual paydown of debt. Adjusted
cash interest coverage and cash flow to capital are expected to
approximate 3 times and 30%, respectively, after 2003, Standard &
Poor's said.

LTV CORPORATION: Trustee Appoints Official Noteholders' Committee
Donald M. Robiner, United States Trustee, represented by Amy L.
Good, Assistant United States Trustee, appointed the following
creditors of The LTV Corporation, being among those holding the
largest unsecured noteholders who are willing to serve, as
members of the Official Committee of Unsecured Noteholders in
these Chapter 11 cases:

      HSBC Bank USA
      c/o Russ Paladino
      140 Broadway
      New York, New York 10005-1180
      Tel: (212) 658-6041
      Fax: (212) 808-7897

      U.S. Bank Trust National Association
      c/o Scott Strodthoff
      180 East Fifth Street
      St. Paul, Minnesota 55101
      Tel: (651) 244-0707
      Fax: (651) 244-5847

      Putnam Investments, Inc.
      c/o Robert Paine (Temporary Chairperson)
      One Post Office Square
      Boston, Massachusetts 02109
      Tel: (617) 760-1734
      Fax: (617) 760-8639

      C/o Joel Klein
      225 West Wacker
      Suite 1200
      Chicago, Illinois 60606
      Tel: (312) 634-2559
      Fax: (312) 634-0053

      C/o J. William Charlton
      520 Madison Avenue
      New York, New York 10022
      Tel: (212) 350-3776
      Fax: (212) 486-6957

      Financial Management Advisors
      C/o Tim Somers
      1900 Avenue of the Stars
      Suite 900
      Los Angeles, CA 90067
      Tel: (310) 229-2940
      Fax: (310) 229-2950

      Teachers Insurance & Annuity Assoc. of America
      C/o Roi G. Chandy
      730 Third Avenue, 4th Floor
      New York, New York 10017
      Tel: (212) 916-6139
      Fax: (212) 916-6140

(LTV Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service,
Inc., 609/392-00900)

LTV CORP.: Increases Cleveland Production & Recalls 400 Workers
LTV Steel (OTC Bulletin Board: LTVCQ) said that it is restarting
a blast furnace, steelmaking shop and hot strip mill, which have
been idle since November 2000, at its Cleveland Works integrated
steel plant. 400 employees began returning to work on Sunday,
February 4.

Approximately 200 employees remain laid off or assigned to lower-
paying jobs at the plant. The additional production will be
shipped to LTV Steel's Hennepin, Illinois finishing plant to
satisfy increased orders for cold rolled and galvanized steel,
and to increase inventories in preparation for a reline of a
blast furnace at LTV's Indiana Harbor Works.

LTV Steel usually produces steel for the Hennepin Plant at the
Indiana Harbor Works.  However, the Indiana Harbor Works cannot
increase the output of its two blast furnaces without using
natural gas, which is prohibitively expensive.  LTV's Cleveland
and Indiana Harbor blast furnaces are currently using lower cost
fuel oil, which results in lower furnace productivity than
natural gas.  Consequently, the most economical way to increase
steel production is to restart the C-1 blast furnace at the
Cleveland Works.  C-1 was removed from service for relining and
repair in November of 2000.  The furnace has remained idle
because of high levels of unfairly traded imports and low steel

LTV Steel said that while it is currently experiencing higher
incoming order rates, the overall level of orders remains well
below last year.  The Company also said that continuing operation
of C-1 blast furnace and its related steelmaking and rolling
operations depends on future order rates and energy costs.

"The domestic steel market continues to be distorted by high
levels of unfairly traded foreign-made steel which have driven
prices down to 20-year lows," said Richard J. Hipple, President,
LTV Steel.  He said that the situation is now being compounded by
a downturn in the automotive sector.

"We urgently need the Federal government to address the steel
trade crisis in an effective, timely manner.  It is frustrating
that the future of the steel industry in the United States, and
the well being of hundreds of thousands of steelworkers and
retirees, depends on the resolve of the federal government to
enforce our trade laws," Hipple said.  "In the meantime, we are
aggressively doing everything we can to respond to the immediate
challenges facing LTV Steel.  We are aggressively implementing
cost reduction measures that will have far-reaching benefits."

Hipple noted that LTV Steel continues to implement and benefit
from actions designed to convert fixed costs into variable costs,
including the permanent closure of LTV's Pittsburgh Coke Plant
and Minnesota iron mining operations.  These units had reached
the end of their economic lives and were unable to provide high
quality raw materials at competitive costs.  LTV Steel now
purchases a major portion of its iron ore and metallurgical coke
on the open market.  Hipple also said that these and other
actions have reduced LTV Steel's workforce by about 26% and
enabled the company to avoid approximately $1 billion in future
capital investments.

He also cited the consolidation of the Cleveland Works Finishing
departments and the installation of advanced hot dip galvanizing
technology at Columbus Coatings Company as measures designed to
enhance LTV's ability to produce high-quality, value-added
products for the automotive and other quality-critical markets.

The LTV Corporation is a manufacturing company with interests in
steel and metal fabrication.  LTV's Integrated Steel segment is a
leading producer of high-quality, value-added flat rolled steel,
and a major supplier to the transportation, appliance, electrical
equipment and service center industries.

MARINER POST-ACUTE: Seeks Exclusivity Extension through Apr. 30
Mariner Post-Acute Network, Inc. asked the Court to approve a
further extension of the period within which they have the
exclusive right to file a plan or plans of reorganization to and
including April 30, 2001, and an extension of the period for them
to solicit acceptances of such plan(s) to and including July

The Debtors submitted that they have met all legal standards for
such an extension and ample cause exists for granting their
request. First, their cases are large and complex, the Debtors
reminded the Judge. Second, the Debtors believe they have made
significant additional progress in the reorganization of their
cases. However, there is still an enormous work to do before a
plan of reorganization can be proposed or confirmed and they need
more time before they can propose a consensual plan of
reorganization. Third, the Debtors assured that they are not
seeking to use exclusivity to pressure creditors into accepting a
plan of reorganization. In providing further justification, the
Debtors told Judge Walrath that they are generally making
required postpetition payments and effectively managing their
business properties.

The Debtors noted that the process of substantive plan
negotiations in the MPAN cases is still in its early stages. To
date, the principal creditor constituencies have been required to
devote their attention to analyzing assets and operations in the
MPAN cases, and in developing a business plan, the Debtors told
the Judge.

In particular, the Debtors drew the Court's attention to the
reorganization of the Mariner Health cases which the Debtors
believe will have a substantial impact on MPAN. The Debtors
advised that the Health DIP lenders have consented to an
extension of the period for Health to file a plan to February 20,
2001. As it is not likely that a plan of reorganization in the
MPAN cases will be filed until more progress is made in the
Health cases, the Debtors believe that the requested additional
extension of the Exclusivity Periods is warranted and
appropriate. (Mariner Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

NEWSTAR MEDIA: Selling Publishing Assets for $4,000,000
NewStar Media Inc. (OTC: NWST) has announced plans for the sale
of its printed and audio book publishing assets and its
television and filmed entertainment assets. NewStar and its
subsidiaries filed voluntary petitions for Chapter 11 relief in
the United States Bankruptcy Court for the Central District of
California (jointly administered under Case No. LA-00-025859-ES).

On January 26, 2001, the Bankruptcy Court approved sales
procedures for the sale of NewStar's printed and audio book
publishing assets and set a sale hearing date of February 26,
2001. The proposed sale provides for an approximately $4,000,000
purchase price and is subject to the overbid procedures set forth
in the Court's order.

On January 25, 2001, NewStar entered into a letter of intent to
sell its television and filmed entertainment production and
distribution assets. Consummation of the sale is subject to
completion of due diligence and other customary closing
conditions, including court approval of the proposed sale and
overbid procedures.

The pending sales include substantially all of the Company's
operating assets. It is not anticipated that the net proceeds of
the pending sales, together with any amounts that may be realized
from the Company's remaining assets, will be sufficient to
satisfy the expenses of the bankruptcy proceeding and the claims
of the Company's creditors. Accordingly, it is not anticipated
that there will be distributions to shareholders of the Company
in respect of their ownership of stock.

OMEGA HEALTHCARE: Moody's Junks REIT's Credit Ratings
Moody's Investors Service has lowered the credit ratings of Omega
Healthcare Investors, Inc. Said ratings are:

      * Senior unsecured long-term debt lowered to Caa1, from B3;

      * Senior debt issuable under the shelf lowered to (P)Caa1,
        from (P)B3;

      * Cumulative convertible preferred stock downgraded to "ca",
        from "caa";

      * Cumulative preferred stock issuable under the shelf
        downgraded to (P)"ca", from (P)"caa";

      * Noncumulative and junior preferred stock issuable under
        the shelf lowered to (P)"ca", from (P)"caa.

The outlook for the REIT's ratings remains negative. According to
Moody's, this reflects the possibility that the company might
undergo a corporate restructuring that could impair bondholders'
and preferred stock investors' positions, as well as continued
stresses on Omega's financial position and on healthcare real

Moody's also relates that these rating changes reflect Omega
Healthcare's suspension of its common and preferred stock
dividends, and the continuing pressure on the REIT stemming from
its near-term debt maturities, as well as from its troubled
operators and mortgagors. Such stressed entities are said to
affect over half of Omega's properties. Moody's further states
that investments in or mortgages on long-term care facilities
comprise over 90% of Omega's asset base. In some cases, this
asset type reportedly experiences downgrades in market value. The
declining values of these properties may challenge Omega's
ability to encumber and/or sell assets in a restructuring,
Moody's says.

While the dividend suspensions will help Omega retain cash and
meet its debt maturities, a turnaround in the risk profile of
Omega's healthcare operators, and success by the REIT in
addressing its near-term debt maturities, would be credit
positives for the REIT and could lead to upward rating actions,
according to Moody's. Longer term, Omega will need to clarify its
strategic direction.

Michigan-based Omega Healthcare Investors, Inc. [NYSE: OHI] is a
Real Estate Investment Trust (REIT) investing in and providing
financing to the long-term healthcare industry.

OWENS CORNING: Asks for Extension of Removal Period to May 3
Owens Corning filed a Motion asking that Judge Walrath extend the
time during which the Debtors may file notices of removal of the
numerous judicial and administrative proceedings to which the
Debtors are parties throughout the country. These actions involve
a wide variety of claims. Due to the number of actions and
variety of claims, the Debtors have asked for additional time to
determine which, if any, of these actions should be removed to
federal courts and, if appropriate, transferred to the District
of Delaware. The Debtors asserted that the adversaries in these
various matters will not be prejudiced by any extension because
the adversaries may not prosecute the actions absent relief from
the automatic bankruptcy stay.

The Debtors have therefore requested an additional period to and
including May 3, 2001, in which removal of pending judicial and
administrative proceedings may be effected. (Owens Corning
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

SAFETY-KLEEN: Amends $100,000,000 DIP Financing Pact With Lenders
The restatement of Safety-Kleen's 1997, 1998 and 1999 financial
statements is not complete.  To avoid triggering a default under
the DIP Financing Facility, Safety-Kleen Services, Inc., and its
syndicate of DIP Lenders (Toronto Dominion (Texas), Inc., The
Toronto-Dominion Bank, The CIT Group/Business Credit, Inc., Bank
of America, N.A., Bank One, N.A., Goldman Sachs Credit Partners,
L.P., and Senior Debt Portfolio, by Boston Management and
Research, as Advisor) entered into a First Amendment to the DIP
Credit Agreement.

Under the First Amendment, the new outside deadline by which the
Debtors must deliver restated financial statements to the Lenders
is February 28, 2001. The First Amendment requires that the
Debtors must make various requests to the Lenders for short-term
extensions. The Lenders have the right to grant or withhold their
consent. (Safety-Kleen Bankruptcy News, Issue No. 13; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

SUN HEALTHCARE: Court Stays Highland's Motion On New River Lease
One of the Debtors, Retirement Care Associates, Inc. (RCA),
sublease from Mediaid of America, Inc. the facility now known as
SunBridge Care and Rehabilitation for New River Valley, formerly
known as Highland Manor Nursing Home, located in Dublin,
Virginia. Since February 1996, RCA has been in possession of and
has operated the Facility.

Mediaid, as lessee and sublessor, leased the Facility from New
River Valley Associates, Inc., as owner and lessor in April,

In or around July 2000, Highland Ridge Rehab Center, LLC
purchased the Facility from New River and began negotiations with
Sun Healthcare Group, Inc., the debtors, to take over operations
at the New River Facility, presumably after completing due
diligence on the condition of the facility.

The Debtors did not consent. In light of increasing profitability
of the New River Facility due to recent changes in the
Medicare/Medicaid disbursement policies of the state of Virginia,
the Debtors wanted to retain control of the New River Facility
until they could properly assess the value of the Facility and
make an informed decision about whether to assume, assume and
assign or reject the Sublease.

Highland then negotiated a termination of the Master Lease with
Mediaid. The Debtors accused this as an attempt to make an end-
run around negotiating a fair deal with the Debtors. The Mediaid
Settlement was based on certain alleged defaults under the Master
Lease, including the alleged failures to pay certain taxes and
maintain the property.

Subsequent to the consummation of the Mediaid Settlement,
Highland sent a notice demanding for possession and control of
the New River Facility. The Debtors declined, asserting their
right of possession of the facility and telling Highland that
they their attempts to retake possession of the facility were in
violation of the automatic stay provided by the Bankruptcy Code.
Highland sent more notices demanding immediate possession of the

Highland also sent notices to the Debtors' employees and the
residents of New River Facility of Highland's intention to take
over operations of the New River Facility.

Moreover, Highland initiated the Virginia Action in The Circuit
Court of the County of Palaski, to enforce the alleged
termination of the Sublease, styled Highland Ridge Rehab Center,
LLC v. Retirement Care Associates, Inc. Case No. CL 00000189-00.

Upon the Debtors' Emergency Motion to Enforce Automatic Stay
Against Highland Ridge Rehab Center, LLC and For Sanctions, the
Bankruptcy Court ruled that Highland's actions did in fact
violate the Bankruptcy Code and ordered the Virginia Action
stayed. The Bankruptcy Court held that despite the Mediaid
Settlement for the termination of the Master Lease, the Sublease
with RCA did not automatically expire by its stated term pursuant
to section 362(d)(10) of the Bankruptcy Code, and that RCA was
protected by the automatic stay.

Highland moved the Bankruptcy Court for an order (a) compelling
RCA to honor its post-petition obligations under the lease; (b)
compelling RCA to reject the lease; and (c) compelling RCA to
vacate the non-residential real property.

               Highland's Argument

Highland contend that the termination of the Master Lease
terminated the Sublease and, therefore, the Debtors no longer
have a right to possession of the New River Facility.

Highland also accused RCA of various areas of significant
structural neglect and disrepair at the New River Facility, which
Highland asserts as defaults under the Master Lease and the
Sublease. Highland tells Judge Walrath that further neglect may
constitute a regulatory violation commonly referred to as
"immediate jeopardy."

Highland drew the Court's attention to the July, 2000 Statement
of Deficiencies and Plan of Correction prepared by Virginia
Department Health staff and New River Facility staff, and the
resurvey of the Facility between October 11-13, 2000 to
investigate a complaint lodged by a facility resident as well as
to determine if the Facility had achieved compliance with
Medicare and Medicaid survey and certification requirements per
42 C.F.R. section 488.330. Highland alleges that during the
visit, the Virginia Department of Health found the New River
Facility not to be in compliance with Federal participation
requirements for the long term care Medicare/Medicaid program.

According to Highland, based on the revisit survey, the Virginia
Department of Medical Assistance Services will deny payment for
new admissions at the New River Facility as of November 9, 2000.
Highland further charges that RCA's failure to achieve compliance
with Medicare and Medicaid survey and certification requirements
puts the New River Facility at risk of non-payment from Medicare
for new admissions and such nonpayment by Medicaid and Medicare
will continue until RCA can achieve compliance.

Highland contends that the lack of Medicare and Medicaid payment
to RCA impairs RCA's ability to meet its current lease
obligations and its ability to make the needed corrections and
repairs. Failure to maintain the facility in accordance with
Medicare and Medicaid survey and certification requirements in
turn could result in civil penalties to the new operator and
owner, Highland alleges. Highland put forward the amount of
$400,000 as the estimated cost secured from various local
contractors for making reparations at the Facility.

               RCA's Argument

The Debtors found that Highland's actions in taking possession of
the facility is in violation of the automatic stay under the
Bankruptcy Code.

The Debtors asserted that, because the leases are valuable assets
to the estates, they seek to withhold decision for assumption or
rejection until they can properly assess the value of the
Facility and make an informed decision, in line with the
Bankruptcy Court's granting of extension of the period for
assumption/rejection of non-residential real property leases in

The Debtors pointed out that Highland's allegations represent
gamesmanship on their part to force a rejection of the sublease
when other means to gain control over the premises have failed.
The Debtors reminded the Court that while Highland has alleged,
it is only one month before that they purchased the Facility.

The Debtors asserted that they are not under obligations to make
all of the repairs mentioned in Highland's motion but they do
have made numerous improvements to the Facility based on concerns
raised by Highland. As to Highland's laundry list, the Debtors
asserted that the items listed for repairs are unnecessary and
suggest renovating the Facility to a condition far superior to
that in which it was turned over to the Debtors. The Debtors also
pointed out that Highland has failed to specify how the quotes of
$400,000 were solicited.

As to the survey conducted by the Virginia Department of Health,
the Debtors told the Court that this relates to alleged
deficiencies in patient care rather than the physical state of
the Facility. In this regard, the Debtors advised the Court that
they have worked with VDH to rectify the alleged deficiencies.

With respect to Highland's allegations that the Debtors failed to
pay taxes that accrued prepetition but came due postpetition, the
Debtors contend that pursuant to jurisdiction governing the
cases, such taxes are not postpetition obligations of the

Overall, the Debtors believe that they have complied with all of
their postpetition tax obligations, have performed all of their
necessary maintenance obligations pursuant to the terms of the
Master Lease and Sublease, and have rectified or are working to
rectify all of the operational deficiencies identified by the

The Debtors believe that Highland's motion to compel should be
denied because the Debtors have been granted an extension of the
period through the earlier of April 11, 2001 and the date of
confirmation of a plan to make their election regarding the
assumption/rejection of leases, in recognition of the value of
the leases to Sun's estates. Absent a substantiated showing of
harm by Highland, the Debtors should not be required to make a
precipitous decision regarding whether to assume, assume and
assign, or reject the Sublease.

The Debtors reminded the Court that they will be severely
prejudiced if the stay is lifted at this time and Highland is
allowed to prosecute the Virginia Action or otherwise seek
possession of the New River Facility on state law grounds,
considering the time and attention that the Debtors and their
professionals have to divert to the matter. By comparison,
Highland is experiencing no real prejudice from the Debtors'
continued habitation and administration of the New River

The Debtors observe that Highland's motion to compel is
essentially a request for the Bankruptcy Court to determine
whether the Debtors are in compliance with the terms of a
Sublease and Master Lease which it contends has already
terminated. The Debtors see no reason why they should make costly
and time consuming repairs if a Virginia state court will find
that, regardless of such repairs, the Debtors have no right to
retain their Sublease.

Furthermore, the Debtors drew the Court's attention to the
probability of prevailing on the merits. The Debtors note that
the Sublease actually conveyed to RCA all of Mediaid's interests
in the New River Facility and, therefore, Highland was not in a
position to trigger the termination of the Sublease through an
agreed-to termination of the Master Lease. Virginia law, the
Debtors remark, holds that where a tenant purports to convey its
entire leasehold interest to a subtenant, the transaction will be
considered an assignment rather than a sublease, regardless of
what title the parties give to the form of the conveyance. Here,
the Debtors cite the case Tidewater Investors, Ltd. V. United
Dominion Realty Trust, 804 F.2d.293 (4th Cir. 1986). The Debtors
argued that under Virginia law, the Sublease has not yet been
terminated. Accordingly, the Debtors conclude that they are more
likely than not to prevail on state law grounds.

               Highland's Reply

Highland contends that under Virginia law, a lease is treated as
any other contract when the court is interpreting its provisions
and courts are directed to attempt to ascertain and give effect
to the intention of the parties as expressed in the contract.
Highland then points to a term in the Sublease which says that
the Sublease "shall expire upon termination of the Master Lease."
Highland further asserts that it is a fundamental principle of
landlord-tenant law that neither an assignee nor a sublessee
has any greater right against the owner of property than an
assignor or sublessor may have pursuant to the underlying master
lease. As in re Tidewater, Highland argues that the case served
as a basis for permitting a sublessee to maintain an action
directly against the owner of property and has not been
interpreted to completely eliminate the rights and
responsibilities of the primary tenant/sublessor. Highland
therefore concludes that the Debtors' position is neither
supported by case law, nor by the plain terms of the Sublease
executed by RCA, Mediaid and New River.

               The Debtors' Compromise and Suggestion

For the sake of reaching a reasonable settlement, the Debtors
indicate that they are willing to agree to a lifting of the
automatic stay for the limited purpose of allowing the Virginia
state courts to determine whether the Debtors have a right to
possession of the New River Facility. In the event that the
Debtors are not found to have a possessory interest in the
New River Facility, the Debtors agreed to transition out of the
New River Facility within three months of the expiration of any
appeal period or the entry of any final order by the Virginia
state courts on the issue, subject only to Highland's ability to
obtain the necessary licensure from the state of Virginia to
operate the New River Facility. If the Debtors were determined to
have a possessory interest in the Facility, within two months
from the entry of a final order by the Virginia state courts on
the issue, Highland would be free to renotice its Motion to
Compel. The Debtors urge this Court to accept it in resolution of
Highland's Motions if the Court does not determine to deny
Highland's Motions in their entirety.

               The Court's Order

Judge Walrath entertained the arguments on both sides and found
that Highland and Mellette's actions to alter or foreclose on the
Debtors' property interest in the Sublease violated the automatic
stay provisions of the Bankruptcy Code. However neither Highland
nor their counsel Mellette shall be sanctioned for such violation
because the Judge found that their actions were taken in a good
faith, albeit erroneous, interpretation of 11 U.S.C. Section

Pursuant to the Court's order, the automatic stay continues to
stay prosecution of the Virginia Action, and Highland is enjoined
from continuing and/or pursuing the Virginia Action without
further order or relief from the Bankruptcy Court. (Sun
Healthcare Bankruptcy News, Issue No. 18; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

TALISMAN ENTERPRISES: Files an Assignment in Bankruptcy
Talisman Enterprises Inc. (Nasdaq:BATT) announced that the
company has filed an assignment in bankruptcy under the
Bankruptcy and Insolvency Act of Canada effective Friday,
February 2, 2001.

In announcing the assignment, Talisman management emphasized that
despite considerable attempts to refinance the business, it is
impossible to continue day-to-day operations without the support
of its secured lender.

TRANS WORLD: Competitors Call Boeing about TWA's 717 Contracts
Boeing Co.'s smallest bird in the sky may get a boost from an
unlikely source: the bankruptcy of one of its best customers,
according to Reuters.  At least two airlines have inquired about
35 106-seat 717 jetliners on order from bankrupt Trans World
Airlines Inc. (TWA), which may come back on the market if a
proposed merger with American Airlines parent AMR Corp. gets
done.  AirTran Holdings Inc., which like TWA ordered 50 of the
airplanes, and Midwest Express Holdings Inc. have said they might
snap up TWA's 717s, which might be available at attractive

"That (pricing), I would say, is among a number of issues
associated with the 717 right now," said AirTran spokesman Jim
Brown. "We are in informal discussions and the primary reason is
simply because there may be more 717s available." Boeing has
already delivered 15 717s to TWA and about 30 to AirTran.
Orlando, Fla.-based AirTran, which is replacing its aging fleet
with the ultra-efficient 717, could use the extra new planes to
accelerate that process or to expand operations, possibly at
National Airport in Washington, D.C. "The 717s have availability
in mid-2002 and the A318 in 2003," she said, noting the airline
had enough fleet flexibility to go with either model. AMR has not
yet decided the fate of the 35 undelivered TWA 717s. If it
abandons them, it could spell an opportunity for Midwest Express.
(ABI World, February 5, 2001)

U.S. WOOD: Wants Until Mar. 28 to Assume or Reject Leases
U.S. Wood Products, Inc. filed a motion for a second extension of
the debtor's time to assume or reject unexpired leases of
nonresidential real property.

A hearing on the motion will be held before the Honorable Sue L.
Robinson, US Bankruptcy Court, District of Delaware, tomorrow,
February 8, 2001, at 6:00 PM.

The debtor asserts that it has already made progress in
systematically disposing of certain of its assets. The debtor is
filing an application to retain the services of Phoenix
Management Services, Inc. as restructuring advisors to assist the
debtor, among other things, in determining the best course of
action in respect to the debtor's remaining assets. The debtor's
new restructuring advisors will need sufficient time to analyze
the debtor's remaining leases and formulate a course of action in
respect of their disposition. Therefore, the debtors seek a
sixty-day extension from January 27, 2001 to March 28, 2001.

WHEELING-PITTSBURGH: To Increase Steel Selling Prices on March 4
Wheeling-Pittsburgh Steel Corporation announced that it will
raise transaction prices with orders scheduled for shipment on
and after March 4, 2001. Hot Rolled Sheet will increase by $40
per ton. Cold Rolled Sheet and Coated Sheet products will
increase by $30 per ton.

"This increase is intended to restore a portion of the pricing
which has significantly and continuously deteriorated over the
past 12 months," said James G. Bradley, President of Wheeling-
Pittsburgh Steel.

Wheeling-Pittsburgh Steel Corporation is the ninth largest
integrated domestic steel maker. It filed for Chapter 11
Bankruptcy Protection on November 16 citing low pricing caused by
illegal foreign steel imports.

* Meetings, Conferences and Seminars
February 8-10, 2001
    American Bankruptcy Institute
       Rocky Mountain Bankruptcy Conference
          Adam's Mark Hotel, Denver, Colorado
             Contact: 1-703-739-0800 ot

February 22-23, 2001
       Commercial Real Estate Defaults, Workouts,
       and Reorganizations
          Wyndham Palace Resort, Orlando
          (Walt Disney World), Florida
             Contact: 1-800-CLE-NEWS

February 25-28, 2001
        Norton Bankruptcy Litigation Institute I
           Marriot Hotel, Park City, Utah
              Contact: 770-535-7722 or

February 28-March 3, 2001
       Spring Meeting
          Hotel del Coronado, San Diego, CA
             Contact: 312-822-9700 or

March 4-6, 2001
    International Bar Association
       2001: An Insolvency Cyberspace Odyssey
          The Ritz Hotel, Lisbon, Portugal
             Contact: 011-440-20-7629-1206 or

March 8-9, 2001
       Corporate Mergers and Acquisitions
          Renaissance Stanford Court, San Francisco, California
             Contact: 1-800-CLE-NEWS

March 16, 2001
    American Bankruptcy Institute
       Bankruptcy Battleground West
          Century Plaza Hotel, Los Angeles, California
             Contact: 1-703-739-0800 ot

March 28-30, 2001
       Healthcare Restructurings 2001
          The Regal Knickerbocker Hotel, Chicago, Illinois
             Contact: 1-903-592-5169 or

March 29-April 1, 2001
       Norton Bankruptcy Litigation Institute II
          Flamingo Hilton; Las Vegas, Nevada
             Contact: 1-770-535-7722 or

April 19-21, 2001
       Fundamentals of Bankruptcy Law
          Pan Pacific Hotel, San Francisco, California
             Contact: 1-800-CLE-NEWS

April 19-22, 2001
    American Bankruptcy Institute
       Annual Spring Meeting
          J.W. Marriott, Washington, D.C.
             Contact: 1-703-739-0800 ot

April 26-29, 2001
       71st Annual Chicago Conference
          Westin Hotel, Chicago, Illinois

May 14, 2001
    American Bankruptcy Institute
       NY City Bankruptcy Conference
          Association of the Bar of the City of New York
          New York, New York
             Contact: 1-703-739-0800 ot

May 17-18, 2001
       Bankruptcy Sales & Acquisitions
          The Renaissance Stanford Court Hotel,
          San Francisco, California
             Contact: 1-903-592-5169 or

June 7-10, 2001
    American Bankruptcy Institute
       Central States Bankruptcy Workshop
          Grand Traverse Resort, Traverse City, Michigan
             Contact: 1-703-739-0800 ot

June 13-16, 2001
     Association of Insolvency & Restructuring Accountants
        Annual Conference
           Hyatt Newporter, Newport Beach, California
              Contact: 541-858-1665 or

June 25-26, 2001
       Advanced Education Workshop
          The NYU Salomon Center at the Stern School
          of Business, New York, NY
             Contact: 312-822-9700 or

June 28-July 1, 2001
       Western Mountains, Advanced Bankruptcy Law
          Jackson Lake Lodge, Jackson Hole, Wyoming
             Contact:  770-535-7722 or

June 28-July 1, 2001
    American Bankruptcy Institute
       Hawaii CLE Program
          Outrigger Wailea Resort, Maui, Hawaii
             Contact: 1-703-739-0800 ot

July 12-15, 2001
    American Bankruptcy Institute
       Northeast Bankruptcy Conference
          Stoweflake Resort, Stowe, Vermont
             Contact: 1-703-739-0800 ot

July 26-28, 2001
       Chapter 11 Business Reorganizations
          Hotel Loretto, Santa Fe, New Mexico
             Contact: 1-800-CLE-NEWS

August 1-4, 2001
    American Bankruptcy Institute
       Southeast Bankruptcy Conference
          The Ritz-Carlton, Amelia Island, Florida
             Contact: 1-703-739-0800 ot

September 6-9, 2001
    American Bankruptcy Institute
       Southwest Bankruptcy Conference
          The Four Seasons Hotel, Las Vegas, Nevada
             Contact: 1-703-739-0800 ot

September 14-15, 2001
    American Bankruptcy Institute
       ABI/Georgetown Program "Views from the Bench"
          Georgetown University Law Center, Washington, D.C.
             Contact: 1-703-739-0800 ot

October 3-6, 2001
    American Bankruptcy Institute
       Litigation Skills Symposium
          Emory University School of Law, Atlanta, Georgia
             Contact: 1-703-739-0800 ot

November 29-December 1, 2001
    American Bankruptcy Institute
       Winter Leadership Conference
          La Costa Resort & Spa, Carlsbad, California
             Contact: 1-703-739-0800 ot

April 18-21, 2002
    American Bankruptcy Institute
       Annual Spring Meeting
          J.W. Marriott, Washington, D.C.
             Contact: 1-703-739-0800 ot

June 6-9, 2002
    American Bankruptcy Institute
       Central States Bankruptcy Workshop
          Grand Traverse Resort, Traverse City, Michigan
             Contact: 1-703-739-0800 ot

December 5-8, 2002
    American Bankruptcy Institute
       Winter Leadership Conference
          The Westin, La Plaoma, Tucson, Arizona
             Contact: 1-703-739-0800 ot

April 10-13, 2003
    American Bankruptcy Institute
       Annual Spring Meeting
          Grand Hyatt, Washington, D.C.
             Contact: 1-703-739-0800 ot

December 5-8, 2003
    American Bankruptcy Institute
       Winter Leadership Conference
          La Quinta, La Quinta, California
             Contact: 1-703-739-0800 ot

The Meetings, Conferences and Seminars column appears in the TCR
each Wednesday.  Submissions via e-mail to are encouraged.


Bond pricing, appearing in each Monday's edition of the TCR, is
provided by DLS Capital Partners in Dallas, Texas.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals. All titles are
available at your local bookstore or through Go to order any title today.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard
Group, Inc., Washington, DC USA. Debra Brennan, Yvonne L.
Metzler, Aileen Quijano and Peter A. Chapman, Editors.

Copyright 2001.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $575 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 301/951-6400.

                      *** End of Transmission ***